Re: FN-FORUM: Ir35 legislation & opting out ?

date posted 30th October 2007 20:23

Whoops, make that 920 + vat (blushes at the fact he can't add 720 an 200) :)

Dominic Raywood wrote:
>
> Well guys; I may be able to offer some first hand experience here. I
> have a ltd company and mainly work with large companies either
> contracting direct, or via an agency (spit).
>
> I don;t know how much you spend running your company currently; but I
> pay an accountant £60 a month + vat and they do everything for me -
> payroll, vat returns, PAYE, annual returns, one personal tax return etc.
> I also made the rather excellent decision to join the Professional
> Contractors Group. I joined them when they started up and have not
> looked back. I pay them £200+vat per year.
>
> I recently had an IR35 investigation. The PCG dealt totally with the
> Inland Revenue; I didn't have to write, read or speak to them! All
> correspondence went directly between them. It ALL stemmed on contracts
> and nothing else - nothing! By ensuring I have IR35 friendly contracts,
> whether working via an agency, or direct; they all passed IR35. They
> gave me a clean bill of health after a very short investigation - which
> I believe is quite rare. All I have now to haggle about is expenses
> etc. The other big factor helping me I feel, was the minimal Web Design
> work I get - effectively meaning I have continuous multiple
> customers/clients. I also advertise by way of the website, Yellow Pages
> ads over the years etc. Basically, good contracts and avoiding ANY
> pointers to hidden employment e.g. turn down any free gym memberships,
> free parties. Try to use a personal email if they will let you. Don't
> fill in any holiday request forms - just tell them when you will be
> taking time off. Every client I have worked for understands about IR35
> and they are all happy to help to a degree.
>
> I don't know how much you currently spend running your business, but my
> 1020+vat a year is it. I have had free banking since I started in 1996
> - not one charge.
>
> Think of the costs as insurance. You'll probably be earning around 100k
> if you are contracting. 1% (tax deductible) is a small price. If you
> also register for VAT, that will return some of that £1020 anyway. I
> use the fixed price VAT scheme, where I charge 17.5%, but pay something
> like 13.5%? Basically, I can't claim VAT back when I spend, but I
> retain the 4% (or there abouts) on every invoice I raise. My accountant
> reckons I saved well over £1000 last year doing this - which has offset
> the "costs" of running my business. Add to that the ability to take a
> low salary and use dividends and the Employer's NI isn;t a big issue
> either.
>
> Most accountants will get you an off the shelf company for nothing in
> 24hrs.
>
> You will definitely pay more tax through an umbrella company - I
> guarantee it!
>
> In summary: If the work is lucrative enough, then the costs will be far
> out-weighed by the earnings. Join the PCG and make sure you use a
> contract recommended by them. Leave the contract discussions until
> after you have the contract offer. Then, hold out if the agency gets
> funny; I have found they will ALL move on contracts if they see their
> 10%-20% disappearing!
>
> Yes, running a company is a little hassle, but I don;t think a limited
> comany need be that onerous to be honest; especially if your accountant
> does 95% of the work for you, like mine does.
>
> If you have any specific questions: bank, accountant etc. feel free to
> contact me directly.
>
> :)
>
> Alain Williams wrote:
>> On Tue, Oct 30, 2007 at 06:46:29PM -0000, Phillip Healey wrote:
>>> I can't see how this is at all true. If it were, then it would
>>> effectively
>>> rule out any self-employed person from ever doing any work. With
>>> actually
>>> knowing 100% the facts, I would suggest that this is nothing more than
>>> paranoid nonsense from the company you are working with. They obviously
>>> think that pushing you into using an umbrella company will rid them
>>> of any
>>> risks they?ve dreamt up regarding taxation etc.
>>
>> If you do a runner and don't pay your tax then the agency could
>> be liable to pay your tax. If they contract a Ltd company
>> then they don't have the liability. It is a small risk, but
>> they won't take it. Most contract agencies are like this.
>>
>>> Although I could be wrong, which would be very worrying.
>>>
>>> Regards
>>> Phill Healey
>>> Munklefish
>>> Po Box 70
>>> Manchester
>>> M34 3SQ
>>> T: 0161 408 4759
>>> ?
>>>
>>> -----Original Message-----
>>> From: [EMAIL REMOVED] [EMAIL REMOVED] On Behalf Of steve
>>> wilson
>>> Sent: 30 October 2007 18:28
>>> To: FN-FORUM / [EMAIL REMOVED]
>>> Subject: FN-FORUM: Ir35 legislation & opting out ?
>>>
>>>
>>> Hi guys,
>>>
>>> I am currently doing some freelance work via people4business. I am
>>> having to go through a umbrella company because of new legislation
>>> regarding any unpaid tax will be the responsiblity of the contract
>>> agency. So they need to cover themselves by making their sellers go
>>> through a umbrella company. This way, I basically pay tax as any
>>> normal 9-5 person would.
>>>
>>> The problem for me is, I have to pay admin costs to use the umbrella
>>> company, and also I would like to pay my tax at the end of the year
>>> like any normal freelancer.
>>>
>>> Does anyone know anything of this legislation and if there is a way
>>> around it ? Is the agency im using giving me the correct information ?
>>>
>>> I am told, the only way to get around this is to become a ltd
>>> company. But my earnings do not warrant this at the moment..it is a
>>> lot of paperwork and quite expensive.
>>>
>>> Also, is the opting out clause in people4business relating to this
>>> ir35 legislation ?
>>>
>>> Any help or info is really appreciated.
>>>
>>
>>
>

--
Dominic Raywood
Rubicon Computer Services Limited
W: http://rubiconcsl.com
E: [EMAIL REMOVED]
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Skype: RubiconCSL